Finance News: National Trust buys in to ethical investment

Mathew Little

The National Trust, one of the UK's largest charity investors, is to develop an ethical investment policy.

The trust, which has investment assets worth £686m, will judge corporate records on the environment, CSR and land use and development when deciding where to invest. The policy will be developed as part of the charity's new three-year strategic plan, and the broad outlines of the policy are expected by next year.

The adoption by the trust, the largest conservation NGO in Europe, of an ethical investment policy is another sign of the growing influence that social and ethical principles are having on the financial decisions of charity trustees.

According to research earlier this year, 60 per cent of charities "take into account social, ethical or environmental issues" when determining where to invest.

The trust's director of policy and strategy, Tony Burton, said the new policy would formalise an already existing unofficial policy of deciding investments "based on what feels right.

"We are a conservation and heritage organisation and we don't want to act in a way that undermines those objectives," he said. "We are looking for a long-term commitment to places and communities."

But the trust will adopt a policy of engaging with companies rather than blacklisting particular industries or firm. "We have a clear responsibility to get a good return on our investments, and the companies with most natural fit aren't necessarily going to be the ones that perform best," said Burton.

The Charity commission's draft Sorp, which is expected to form part of this month's Queen's Speech - includes a provision that compels charities with income above £1m to state their stance on ethical investment, in line with requirements for the pension funds industry.

Burton said the trust's move was not directly related to the new Sorp, but was part of a raft of internal changes aimed at increasing transparency and reporting.

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